Free trade is destroying the American economy

August 24, 2011

Your recent article ("Democrats press Obama on jobs tour" Aug 15) lists the people on President Obama's economic team who have come and gone: Larry Summers, Christina Romer, Paul Volker, Peter Orszag, Jared Bernstein and Austan Goolsbee. Only Ben Bernanke and Tim Geithner remain. None of those who left or those that remain has had any affect on restarting the economy or finding jobs. Their only idea is more quantitative easing.

They have all looked in the wrong places for jobs.

The jobs are in Bangalore, India and Guangdong Province in China. Infosys, with 130,000 employees, and Wipro and Tata, all based in India, have destroyed the U.S. software systems development industry. In China, with 900,000 employees, Foxconn is the world's largest manufacturer of consumer electronics as a sub-contractor producing high quality products for sale in the U.S. by Apple, Dell, HP andNokia.

Our problems are obvious. With $60,000 per year software engineers, $25,000 per year call center employees, and $20 per hour manufacturing labor in the U.S., we, practicing free trade, cannot possibly compete with Asian countries practicing mercantilism with $10,000 per year software engineers, $3,000 per year call center employees and $2 per hour manufacturing labor.

Over the last 40 years we have hollowed out our industrial base and exported all or a significant portion of our wealth generating manufacturing industries to Asia: steel, ship yards, automobiles, textiles, clothing, shoes, consumer electronics, computers, photocopying, cameras, industrial instruments, machine tools, household appliances, furniture, coffins, pharmaceutical drugs, cosmetics, soap, pet food, and candy. We now import more food for human consumption than we export. We have moved large segments of our service industries to Asia. Asian companies now dominate green technology.

Ross Perot, the founder of EDS, and Andy Grove, the godfather of information technology and founder of Intel, reach the same conclusion: Free trade is destroying our economy. Warren Buffett targeted unequal trade agreements and proposed a method to eliminate the growing U.S. foreign exchange deficit. Sen. Russell Feingold converted Mr. Buffett's proposal to a bill named the Balanced Trade Restoration Act. It was not enacted.

TARP, the stimulus and QE1 and QE2 had no effect on the U.S. economy. Rather than adopt QE3, QE4, and beyond, enlist Messrs. Perot, Grove and Buffett and use a new approach.